Groupon (NASDAQ:GRPN – Get Free Report) and Monotaro (OTCMKTS:MONOY – Get Free Report) are both consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, institutional ownership, risk, earnings, profitability, analyst recommendations and valuation.
Analyst Recommendations
This is a breakdown of recent ratings and target prices for Groupon and Monotaro, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Groupon | 2 | 0 | 1 | 0 | 1.67 |
| Monotaro | 0 | 0 | 1 | 0 | 3.00 |
Groupon currently has a consensus target price of $23.00, indicating a potential upside of 48.48%. Given Groupon’s higher possible upside, analysts clearly believe Groupon is more favorable than Monotaro.
Profitability
This table compares Groupon and Monotaro’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Groupon | -25.26% | N/A | -20.28% |
| Monotaro | 9.71% | 30.25% | 19.15% |
Valuation & Earnings
This table compares Groupon and Monotaro”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Groupon | $498.42 million | 1.26 | -$83.52 million | ($3.11) | -4.98 |
| Monotaro | $2.23 billion | 3.16 | $217.31 million | $0.47 | 30.29 |
Monotaro has higher revenue and earnings than Groupon. Groupon is trading at a lower price-to-earnings ratio than Monotaro, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Groupon has a beta of 0.29, meaning that its share price is 71% less volatile than the S&P 500. Comparatively, Monotaro has a beta of 1.16, meaning that its share price is 16% more volatile than the S&P 500.
Insider & Institutional Ownership
90.0% of Groupon shares are owned by institutional investors. Comparatively, 0.1% of Monotaro shares are owned by institutional investors. 36.6% of Groupon shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Summary
Monotaro beats Groupon on 9 of the 12 factors compared between the two stocks.
About Groupon
Groupon, Inc., together with its subsidiaries, operates a marketplace that connects consumers to merchants. It operates in two segments, North America and International. The company sells goods or services on behalf of third-party merchants. It serves customers through its mobile applications and websites. The company was formerly known as ThePoint.com, Inc. and changed its name to Groupon, Inc. in October 2008. Groupon, Inc. was incorporated in 2008 and is headquartered in Chicago, Illinois.
About Monotaro
MonotaRO Co., Ltd., together with its subsidiaries, operates an online MRO products store in Japan and internationally. The company offers safety protective equipment, work clothes, and safety shoes; logistics, storage, and packing supplies; tapes; safety, disaster prevention, and crime prevention products; safety signs; ship and fishing supplies; office supplies; office furniture/lighting/cleaning supplies; cutting tools and abrasives; measurement and surveying equipment; hand tools/electric and pneumatic tools; sprays, oils, greases, and paints; adhesives and repair materials; welding supplies; and piping and water related components/pumps/pneumatic and hydraulic equipment/hoses. It also provides mechanical parts; control equipment; soldering and anti-static products; architectural hardware, building materials, painting, and interior supplies; air conditioning and electrical equipment; electrical materials; screws, bolts, nails, and materials; automotive supplies; truck supplies; motorcycle supplies; bicycle supplies; scientific research and development supplies; clean room supplies; kitchen equipment and store supplies; agricultural and gardening supplies; and medical and nursing supplies. It serves factories, construction, automobile maintenance, and other industries. The company was formerly known as Sumisho Grainger Co., Ltd. and changed its name to MonotaRO Co., Ltd. in February 2006. The company was incorporated in 2000 and is headquartered in Osaka, Japan. MonotaRO Co., Ltd. operates as a subsidiary of Grainger Global Holdings, Inc.
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